How Bad Policy Broke the Housing Market ...and How to Fix it!

[2:45] House Prices versus Earnings
paulclaireaux.com/house-price...
[3:12] Average UK House Price Index
landregistry.data.gov.uk/app/...
[4:01] Right to Buy Social Housing Numbers
www.independent.co.uk/news/uk...
[4:36] English Private Landlord Survey
www.gov.uk/government/statist...
[4:51] 74% of Tenants in Work
www.ons.gov.uk/economy/inflat...
[4:59] Proportions Spent on Rent (Homeowners and Renters)
assets.publishing.service.gov...
[5:44] Buy to Let Tax Changes Explained
www.charcol.co.uk/guides/buy-...
[6:40] BTL Limited Companies Data
propertyindustryeye.com/11768...
[6:55] # of BTL Properties and Total # of Properties
www.octanecapital.co.uk/media...
[7:27] % of Landlords Owning x Number of Tenancies
www.gov.uk/government/statist...
[10:19] BTL Portfolio Returns Since 1996
www.ft.com/partnercontent/ham...
[14:08] Two Thirds of Renters Looking to Buy
assets.publishing.service.gov...
[14:48] Argument Against Rent Controls
researchbriefings.files.parli...
[14:55] EHS Data regarding Quality of PRS Housing
nationwidefoundation.org.uk/w...
[15:23] OECD Countries with Rent Controls
www.oecd.org/els/family/PH6-1...
[20:04] 30% of PRS Tenants Paying Landlords via Benefits
www.ons.gov.uk/economy/inflat...
[20:19] 40% of Universal Credit Claimants in Work
www.tuc.org.uk/blogs/universa...
[21:40] Housing Market £9.2 trillion
www.theguardian.com/money/202...
[21:45] UK Economy £2.2 trillion
www.statista.com/topics/6500/...
[22:18] LSE Adam Smith Essay
blogs.lse.ac.uk/politicsandpo...

[@MarianaLng]

Thank you!

[@tonywhite33]

Some good ideas - one thing to keep in mind is why people started doing this. 40 years ago we saw the move from defined benefit pensions to defined contribution pensions. If society as a whole was able to rely on a defined benefit pension, one that was sufficient for them to maintain themselves through retirement, there would be less need for them to invest in property to generate retirement income. The level of income derived from property for retirement could be set at a rate in line with the national average income, or a percentage thereof, and have a favourable tax rate. Any additional properties beyond that would not generate a sufficient ROI due to punitive tax. DB Pensions could also be brought back and companies forced to make good on their commitments, or a combo of the 2.

[@PotterSpurn1]

I sort of agree with much of what is stated in this video, but not everything. Renting is not inherently exploitative if done the correct way.
Truth is there is nothing wrong with having a private rental sector that houses people who can't afford or who don't wish to buy, provided that the rents are not too high. But they are - much too high! Rent is only 'rent' when it is a comfortable amount to pay and therefore a positive sum game for both parties. Then it is merely a cost, just like anything else is a cost - one you can either accept or not accept as being too high or not. But when the rent becomes too much to afford comfortably and the tenant is then left with few choices to pay for somewhere comparable in the same chosen area elsewhere that is affordable to them, then the rent starts to resemble a liability - like a debt (and actually does become debt for some) and a trap, rather like a mortgage is. Only, for the tenant, there is no asset at the end of the rainbow, making the situation far worse for them overall when you compare those who have paid off their mortgage to those who continue to rent.
As soon as a tenant is placed in a no win position like this: they can't afford to stay renting the place they are in, and they can't afford to go elsewhere or buy then the private rental sector becomes a huge problem and that is what many tenants are finding now. The rent charged for the so called 'market rates' has become unaffordable and the tenant is often faced with either paying it - liking and lumping it - and going very short of their own vital needs or not being able to save for themselves to purchase eventually, or they end up leaving jobs and renting miles away from their family and social support system to somewhere cheaper that is undesirable and lacking the amenities and space they need. That is bad for everyone and for society at large and ultimately for the taxpayer who loses out in shelling out for Housing Benefit, for Council Tax reduction awaiting those job leavers, come job seekers, who had to move to find another job, and through lack of productivity due to mental health related issues and physical ones too, which poor expensive poorly maintained housing inevitably brings about.
Rent capping is essential and affordable housing should be a fundamental right. We don't have that now in the PRS. That is why I am also certainly in favour of some mechanism that allows long stay tenants to purchase the properties from investment multi-asset purchasers if they have rented the place for a long period of time long before the current landlord took on their home. That idea can't come too soon, as far as I am concerned.

[@peterdon-duncan7851]

Brilliant video!

[@magnoliaschramm7573]

Would nationalisation of private rental sector apply to the properties held by the wealthy royals, aristocrats and financial institutions or just the small landlords who worked hard to put deposits down?

[@giuliovuolo1]

Interesting. Agree that there is a problem of rentiers vs producers.
But increasing owner occupier supply by switching from renting reduces supply of rental by more , because there is more sharing in rental compared to ownership. That reduced housing supply overall.
We need more ideas to increase total supply.
And maybe also better investment options for landlords cash.
What about help to build instead of help to buy?

[@mikebassett9195]

The problem is all inflation. The confusing thing is understanding how this money enters the market. No clever schemes are needed just get banks under control

[@JS-ie1xo]

What are your thoughts on build to rent?

[@rajk2169]

Very good video!
The problems of expensive housing and skyrocketing rents have been made in Downing Street over the last 40 years!
Housing benefit bills increased from £17bn in 2009 to £25bn last year.
Council tax in England is still based on 1991 property values!
Turning properties into an asset class has long-term consequences!
According to the National Housing Federation, only 345,000 council homes have been built to replace the 1.9 million sold-off since 1980 under the right to buy scheme!
Easy credit, the Right to Buy and Help-to-Buy Votes schemes have created a massive property price bubble and an unsustainable level of debt.
This is what Gordon Brown said in 2003:
"Most stop-go problems that Britain has suffered in the last fifty years have been led or influenced by the more highly cyclical and often more volatile nature of our housing market"

[@JamesClifftons]

I like all the pictures & video, but this has clearly been made by someone who does not understand the market. Firstly, if the social housing has dropped from 6.5m to 2m, where do you think they have gone? The private rental sector houses many in need. Secondly, you would have to be an idiot to give all capital appreciation to the tenant and rent for 10 years but receive no rent, instead the tenant gets this money back as a discount, so the landlord gets what they paid. In essence, they receive nothing. Lol. Rent to own is coming into the PRS slowly, the contracts are in place, except the tenant pays market rent & a top up which comes off the purchase price, for landlords that want to exit. Voluntarily.
All in all, you had might as well said just put a stop to buy to let (which is naturally slowing / coming to end, due to already becoming unattractive in these market conditions) property prices will drop as we enter a recession and less demand for buy to let.

[@surfcitiz]

Describing a self-employed landlord as a person who is not contributing to society is a ridiculous statement. What is the point here? Saw a division?

[@lfcsongs]

Many landlords refer to the rent they collect as "passive income", implying landlords themselves recognise that they are not doing anything to "earn" that money.

[@Nieldyboy]

A landlord still contributes to society though don't they, because they use the money they have gained from rentals to purchase goods from within the community. If anything a current renter, if they were to just pay towards a mortgage they would be contributing less to society. That mortgage money would just be going in to a banks pocket ? Likely Hood that money is spent in the local society is very low

[@lfcsongs]

The buy to let model lots of landlords employ is all about recycling rental income proceeds into additional properties so that you build your property portfolio as big as possible. Money put into those houses exits the circular flow of income immediately. So the income they "earn" (for not contributing to society) often doesn't end up contributing to society afterwards either - it goes straight back out the circular flow into more property.
The whole point of banks is that they are consistently investing money into the economy, lending it to businesses etc in search of a return. So the economy definitely benefits when cash goes to a bank (even if it's just repaying the cash they lent) particularly thanks to how money creation/fractal reserve banking works. It definitely doesn't just disappear into their pockets never to be seen again. "Investment" is one of the three injections into the circular flow of income, driven very much by banks.
Plus if tenants were owner occupiers and spending only 18% of their income on mortgages, rather than 31% on rent... Thats more disposable income to make its way round the circular flow again!

[@rajk2169]

The UK has moved from a nation of shopkeepers to a nation of rent-seekers!
Landowners and developers benefit from speculation and rent-seeking activities.
In Britain, Kevin Cahill, a journalist, calculated that, in 2002, 69% of the land was in the hands of 0.6% of the population. Government statistics show that since then the concentration has intensified. Between 2005 and 2011 the number of landholdings in England had fallen by 10%, while the average size of holdings had risen by 12% - more and more land and housing are owned by a smaller and smaller elite.
In 1985, 61% of UK households were occupied by home owners. In 2019, that figure is 65%. While home ownership has not increased that much, debt has gone through the roof!
The government can easily solve the problem by introducing a tax policy that deters land and property speculation. When a land value tax is in place, it becomes financially far less profitable to sit on unused land and homes.
Since the largest land and property owners are Dukes, no government will take action to deal with rent seekers!

[@mikebassett9195]

The problem is inflation no clever policies are needed. Get the money supply under control, stop bailing banks out. This problem goes away.

[@billpotter3383]

Oh dear - with the very first graph displayed I have to conclude that you are more interested in making a political point than in being factual. Without the bottom (X) axis being displayed these are just pretty lines on a piece of paper.

[@lfcsongs]

Everything is clearly referenced but I will go through and directly link every bit of data within the video to the original source, so you can directly click into anything.

[@jb-hg4us]

Just offer 100% mortgages to first time buyers, then they don’t need a deposit.

[@truthobserver7086]

You say 'god forbid the landlord should pay the mortgage payments'. Maybe you should blame banks,they wont give you a btl mortgage if the rent doesn't cover the mortgage(as banks wouldn't take that sort of risk). Banks lend money to make money(which probably to you is a disgusting idea,maybe they should lend for free). You are obviously a Corbyn supporter. You hate the idea of leveraging or investing(property is a form of investment like art,stocks,crypto).The current climate of btl,shows it isn't always a good investment, actually its a bits **** and **** areas are more prone to house price drops in a recession. The roi isn't even that good and the investment can go up or down.It's called risk,but obviously you think that is unfair and unjust.

[@perolagrande]

Utter garbage. Of course landlords are providing a service, but they also bear risk: tenants might not pay rent, or damage the property and there can be hefty legal bills to evict them. Plus vacant periods between tenancies. All these risks require adequate remuneration, otherwise no-one will want to buy to let. Simple economics here.
You also mistake and misunderstand so-called 'productive' uses of resources, as though you think only a widget factory can be productive, because a widget is a physical asset. The service sector of the economy produces huge value-added, despite there usually not being anything physically produced. A trademark can be worth billions, despite it being 'only' intellectual propriety, not most often without a physical representation.
Landlords are already leaving the sector in droves, creating an enormous scarcity of supply, all contributing to higher rents. Demonising them and making landlordism even less profitable will only exacerbate the problem. No-one has a birthright to own their own home, so your analogy of the handing out of biscuits at a party is not relevant. You don't get anything for nothing, and you can't expect landlords to subsidise tenants and provide cheap housing. The latter is a choice for the state to be possibly involved in.
Concerning council housing, the taxpayer is being diddled by these properties being rented out at such low rates. Council house rents should be doubled over the next few years to bring them closer to market levels, and provide the taxpayer with a decent return on capital. Plus, it would provide much needed additional revenue for councils.